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21. How Innovative Financing Models Can Support the Scaling of Supply Chain Innovations

Author:
Allie Dichiara and John Simon
Publication Date:
10-2022
Content Type:
Special Report
Institution:
Center for Strategic and International Studies
Abstract:
Substantial progress has been made toward achieving Sustainable Development Goal (SDG) 3: Health and Well-Being for All. However, progress is plateauing as global health development funding decelerates, and much of the remaining gaps are among the hardest to address, especially for the most vulnerable and hardest-to-reach communities. A key element to reigniting progress toward SDG 3 is significantly improving the effectiveness of the current fragmented health commodity supply chain, through which billions in spending—approximately $6 billion in donor funds in 2015 and $50 billion in overall spending in 2017—flow each year to low- and lower-middle-income countries (LMICs). Fortunately, there is a growing number of innovative supply chain solutions available across sub-Saharan Africa that could have the potential to dramatically improve the underperforming status quo.
Topic:
Economics, Science and Technology, Innovation, and Supply Chains
Political Geography:
Africa

22. A Model Comprehensive MSME Policy for Indian States

Author:
Richard M. Rossow
Publication Date:
11-2022
Content Type:
Special Report
Institution:
Center for Strategic and International Studies
Abstract:
Small businesses are the job-creating engines of any healthy economy. Having a supportive policy environment can help high-potential businesses accelerate. Creating such an environment is a shared responsibility of both the central government and India’s 28 states. Many state governments in India have piecemeal policies and programs to support micro, small, and medium enterprises (MSMEs). About one-third of India’s states have worked to craft multifaceted and supportive policies and practices to encourage MSME growth. This paper reviews the ideas already enacted in different Indian states, as well as in national and subnational governments around the world. Developing a single comprehensive MSME policy is an effective approach for a state-level government to consider. It allows small firms to find policy incentives and programs in a single place, and perhaps most importantly, it allows a state to directly consider a range of intertwined incentives that can work together. This will maximize the positive impact to small firms that are poised for growth. Facilitating the growth of MSMEs will have a much wider impact on India’s job growth overall. The large multinational manufacturers that India hopes to lure to invest through programs like Make in India require a diverse and efficient network of suppliers. Supporting MSME growth can create a multiplier effect—driving new investment and employment generation by larger firms. The central government has affirmed a 25 percent target of gross domestic product (GDP) for manufacturing, up from around 14 percent today. This white paper provides leading international examples in the promotion of small businesses, while also enumerating best practices from Indian states’ MSME policies. The final section lays out the 30 elements commonly utilized by Indian states to offer targeted assistance to MSMEs as a roadmap for other states that want to provide best-in-class policy interventions.
Topic:
Development, Economics, Business, and Job Creation
Political Geography:
India and Asia

23. Correlates of Politics and Economics: How Chinese Investment in Africa Changes Political Influence

Author:
Carla D. Jones, Mengge Li, and Hermann A. Ndofor
Publication Date:
03-2022
Content Type:
Special Report
Institution:
Foreign Policy Research Institute
Abstract:
This study investigates the impact of Chinese economic engagement in Africa (FDI and loans from China to African countries) on African countries’ international political alignment as evidenced by voting patterns in the UN General Assembly. We find three seasons of Chinese policy in Africa. Pre 2008, Chinese economic engagement in Africa was driven primarily by economic considerations, market seeking for FDI and likely resource seeking for loans. During the Great Recession, China came to terms with its rise as an economic power and thus started leveraging its economic power in international relationships. During this season, both Chinese FDI and loans were no longer driven by economic considerations but rather by international relations which led to increased political alignment with recipient African countries. The final season captured the Xi Jinping era beginning 2013. During this season, Chinese FDI had no effect on African countries’ foreign policy alignment with China, but Chinese loans still had a significant positive effect. This likely reflects a movement away from FDI to less transparent bilateral loans as a means of utilizing Chinese economic power to influence foreign policy. During the entire period of the study, Chinese FDI to Africa resulted in reduced political alignment between African countries and the United States.
Topic:
Foreign Policy, Economics, Politics, Investment, and Influence
Political Geography:
Africa, China, and Asia

24. The Western Mediterranean Transport and Logistics Sector in the Post-Covid-19 Era: Seizing New Opportunities, Accelerating Transitions

Author:
IEMed/EuroMeSCo
Publication Date:
03-2022
Content Type:
Special Report
Institution:
IEMed/EuroMeSCo
Abstract:
The COVID-19 and its socioeconomic consequences have been affecting trade and supply chains worldwide for the last two years. Although global connectivity has been reduced, the transport and logistics sector has played a key role to ensure the continuous provision of food and goods in all regions of the world. This crisis has been somewhat perceived as an accelerator of the processes that were and will continue to affect the sector in the upcoming years: the digital transformation, the sustainability transition, and the growing awareness of the vulnerabilities of global value chains. This emerging context poses significant challenges to the sector together with great opportunities in a region such as the Western Mediterranean. Understanding them to design the adequate policies that will allow the transport and logistics sector to play its crucial role as a driver for regional integration and prosperity is essential.
Topic:
Economics, Transportation, Pandemic, and COVID-19
Political Geography:
Mediterranean

25. Immaterial Competition: Rethinking the Roles of Economics and Technology in the US-China Rivalry

Author:
Arthur Tellis
Publication Date:
05-2022
Content Type:
Special Report
Institution:
Hudson Institute
Abstract:
The US-China rivalry is likely to be the fulcrum around which international affairs are structured in the twenty-first century, akin to the Cold War from 1947 to 1991. This rivalry, like its predecessor, emerges from divergent geopolitical interests and imperatives. While the Chinese Communist Party’s aims are many, various, and subject to change, they include its continued control of the Chinese State; economic and technological modernization and leadership; internal order; complete union with Taiwan on Beijing’s terms; certain territorial concessions from its neighbors; and the disestablishment of security arrangements across the Indo-Pacific that it views as threatening and trammeling. The latter three are in direct conflict with US interests and imperatives in the Indo-Pacific: prohibiting China’s unilateral modification of the status quo vis-à-vis Taiwan; preserving the sovereignty and territorial integrity of its allies and partners; and maintaining its military partnerships and presence in the region. These antithetical interests animate a larger struggle for hegemony in the Indo-Pacific and serve as the terms on which this contest will be decided. Explanations of the rivalry as an ideological contest or a competition born from competing economic interests are less compelling by comparison. The United States and China are motivated to an extent by ideological imperatives, but these do not appear to propel or serve as the central stakes for the rivalry as much as they affect each’s disposition toward the other. Long-standing trade, investment, and commercial disputes and competition, meanwhile, are not so substantial that they motivate the rivalry. While these issues are impactful to niche communities and conspicuous to national policymakers, they are not particularly consequential for national prosperity. The logic of competition, trade, and globalization, in fact, suggests that the US-China commercial relationship is mutually beneficial, notwithstanding each’s concerns with the other’s economic statecraft and market-leading firms. In their geopolitical rivalry, there are a few key forces or contests of interest: path dependence, regime continuity, prudent strategy, third-party alignments, and the balance of military forces in the Indo-Pacific. Each affects the United States’ and China’s ability to achieve their ends and shapes their rivalry. Economic and technological statecraft, by contrast, is largely peripheral to these ends as it does not effectively advance political objectives relevant to territory, borders, security architectures, and national defense. That is not to suggest that economic and technological factors are irrelevant, however; they shape, constrain, and advantage the United States and China across their rivalry’s key forces and contests of interests. Particularly noteworthy are economic and technological factors’ impact on the military balance. Tradition and intuition hold that nations with bigger and more advanced economies are better postured to resource, procure, and manufacture military equipment and can therefore generate greater military power. In the case of the US-China military competition, however, total military power is less relevant than the specific military balance in the Indo-Pacific, in which the distribution and strength of forces in the theater, the capability and reliability of key materiel inputs of outsized importance, and the operational concepts and tactics with which each’s military fights are more important. Total military power—and in particular greater military equipment—matters on the margin, of course, if only because the party with the greater mass and quality of materiel will be able to retain more forces in the Indo-Pacific, maintain more of these key materiel inputs, and develop novel operational concepts and tactics tailored to their superior materiel. Neither the United States’ nor China’s total economic production, public balance sheet, high-technology commercial firms, and scientific production are likely to provide a decisive or lasting advantage on this count. Each country’s economy can support substantially greater military spending, limiting the extent to which one can derive an advantage from the other’s more binding constraints. The capacity and maturity of each country’s defense industrial base is of greater relevance, but these are flexible quotients that investment can improve. This elasticity of defense production suggests that microeconomic endowments may be binding in the short run but variable in the longer run, meaning that policy choices—rather than existing economic endowments—constrain military production. Technological endowments, informing each country’s capacity for broad innovation, are of similarly bounded importance because military technology is somewhat narrow and other factors, such as military procurement processes and inflexibility in concepts of operation, limit the extent to which superior technology translates into military advantage. The fundamental result of this argument is that the concerns that propel the emerging US-China economic and technological competition are ultimately not all that relevant to the matters at the core to their rivalry and to the instruments of national power most relevant to these issues. The US should therefore be wary of policies ostensibly demanded by economic and technological competition and may find its interests better served by limiting its rivalry with China to military competition driven by its core geopolitical interests.
Topic:
Economics, Science and Technology, Strategic Competition, and Rivalry
Political Geography:
China, Asia, North America, and United States of America

26. Understanding and Countering China's Approach to Economic Decoupling from the United States

Author:
John Lee
Publication Date:
08-2022
Content Type:
Special Report
Institution:
Hudson Institute
Abstract:
Many experts have highlighted American efforts to partially decouple from China. Yet China began pursuing a far more ambitious and comprehensive decoupling strategy vis-à-vis the United States long before Donald Trump entered the White House. This monograph examines China’s evolving approach to economic decoupling from the US. It makes the following arguments and conclusions. First, on the back of a preexisting mercantilist political economic structure, China has been explicitly pursuing economic decoupling from US and allied economies on Chinese terms for at least a decade. Second, while the US seeks to decouple some aspects of its economic activity from China, the latter seeks to dominate vast segments of the Asian economy and to decouple these segments from the US. This is the Chinese strategy and threat that the US vastly underappreciates. Third, the most important segments are the high-tech and high-value sectors. These sectors are where competition is the most consequential and where decoupling on US terms needs to occur. Fourth, China faces increasingly serious problems and obstacles regarding its decoupling strategy. Many of these arise out of structural weaknesses inherent in its political economy. The monograph is written to assist the Biden administration and those who follow it to possess a deeper understanding of: China’s actions and the motives behind them; China’s strengths, weaknesses, and vulnerabilities; and How the US and its allies can craft an evolving approach that better plays to their individual and collective strengths and advantages. China hopes the US and its allies will adopt a cautious, gradualist, and ineffective approach to countering Beijing’s strategy and objectives. The Chinese Communist Party knows the US and other advanced economies still have immense advantages despite clever Chinese messaging to the contrary. The US and its allies continue to enjoy considerable leverage and remain well placed to partially decouple from China on their preferred terms, but they need to act quickly, collectively, and decisively.
Topic:
International Relations, Foreign Policy, Defense Policy, Economics, and National Security
Political Geography:
China, Asia, North America, and United States of America

27. State Right-to-Repair Laws Need to Respect Federal Copyright Laws: A Constitutional, Legal, and Policy Assessment

Author:
Devlin Hartline and Adam Mossoff
Publication Date:
08-2022
Content Type:
Special Report
Institution:
Hudson Institute
Abstract:
Various states are considering laws that would mandate that producers of electronic devices provide consumers and repair shops with all the tools and know-how necessary to repair these devices. Proponents of these “right-to-repair laws” argue that consumers should be able to do whatever they want with their devices, whether a smartphone, a smart TV, or a gaming console. Right-to-repair advocates, however, ignore inconvenient facts. These state laws conflict with federal copyright law and are unconstitutional, and they are bad policy as well. First, as a simple legal matter, the proposed right-to-repair laws are unconstitutional. These laws mandate the disclosure and distribution of the code in the computer programs that make our devices work, such as operating systems, apps, and the “digital locks” that protect these computer programs from unauthorized access and copying. Federal copyright law protects all these computer programs and “preempts” any conflicting state laws under the Constitution. Second, state right-to-repair laws are wrong as a matter of policy. These laws upset the long-standing balance of rights implemented by federal copyright law. For over 200 years, Congress has enacted copyright laws to secure to authors and innovators the fruits of their creative labors. These laws have properly balanced the rights of creators, the rights of companies that produce and distribute their copyrighted works, and the rights of consumers and the public. As a result, federal copyright law has been a launching pad for the economic and cultural revolutions in books, movies, music, and now digital games and the internet of things. Everyone values their electronic devices because copyright law provides the legal foundation for today’s thriving digital marketplace. Consumers have access to an incredible selection of movies, music, games, and many other previously unimagined digital goods and services. The same is true for products that consumers have long used and that have become “smart” today, such as phones, TVs, automobiles, and other devices. Overbroad right-to-repair laws fail to acknowledge the legal rights and the underlying policies in federal copyright law that have made all this possible.
Topic:
Economics, Science and Technology, Intellectual Property/Copyright, and Innovation
Political Geography:
North America and United States of America

28. Chinese Information and Influence Warfare in Asia and the Pacific

Author:
John Lee
Publication Date:
09-2022
Content Type:
Special Report
Institution:
Hudson Institute
Abstract:
The People’s Liberation Army’s increasingly provocative and reckless activities in and around disputed zones such as Taiwan, the Senkaku Islands, and the South China Sea constitute only one means through which Beijing seeks to change key aspects of the regional order and compel others to “accept its interests.” However, the Chinese Communist Party and PLA are already decades into China’s information and influence war, which is designed to either weaken the will and capabilities of the United States and its allies should military conflict break out or, even better, eliminate the need for China to use military force to achieve its primary objectives (i.e., to “win without fighting”). In this context, the PLA is several steps ahead of the West; whereas Western analysts observe that the PLA is operating in the “grey zone,” the PLA is instead redefining and expanding this grey zone by manipulating how other countries think about it. With respect to this so-called grey zone, a cost-benefit analysis encompassing both objective and subjective elements typically determines an entity’s decision to respond with military force. For example, crafting narratives about the PLA’s military superiority, elite capture, ability to foment disunity within a target country, or normalization of coercion raises the West’s threshold of what provocations demand a military response—thereby expanding the grey zone within which the PLA and CCP are allowed to operate. Thus, Beijing is well ahead of the US and its allies in conceptualizing and operationalizing the use of military actions other than (kinetic) war to achieve political or strategic objectives. Finally, Asia and the Pacific constitute both the primary and most suitable region within which the Chinese can conduct information and influence warfare. These sub-regions’ unique material, geographical, ideational, and cultural characteristics render them especially suitable for Beijing to successfully wage political warfare. This policy memo describes the key objectives, strategies, and tactics of Chinese information and influence warfare developed and refined for use in the Asia-Pacific region. It focuses on maritime Southeast Asia and the Pacific, the areas of highest interest for the US, Australia, and their allies. Offering Singapore, Thailand, and the Solomon Islands as three pertinent case studies, the memo also lays the groundwork for an examination of effective US and allied counters to Beijing’s activities in these contexts, which follow-up reports in this series will present.
Topic:
Foreign Policy, Economics, National Security, Territorial Disputes, and Information Warfare
Political Geography:
China and Asia

29. A Rotten Money Regime is Responsible for Pandemic and War Inflation

Author:
Brendan Brown
Publication Date:
10-2022
Content Type:
Special Report
Institution:
Hudson Institute
Abstract:
Who is responsible for the Great Pandemic and War Inflation of 2021–22? Is it Federal Reserve Chair Jay Powell, former President Donald Trump, President Joe Biden, or President Vladimir Putin? The answer is that the buck stops at a rotten monetary regime—the so-called “2-percent-inflation standard.” Trying to blame particular individuals may help those who gain from the present monetary status quo. Yet blaming them absolves the monetary regime, which is trampling upon the green shoots whose growth is essential for the renaissance of competitive free-market capitalism. If the United States had a good money regime when first the pandemic and then the Russian war struck the economy, the great monetary inflation that these shocks spawned would not have occurred. The current money regime might well have done better with more capable leadership and good luck—but the regime’s deep flaws prevented the possibility of an overall good outcome. Furthermore, even if the pandemic and war had not struck, the bad money regime was producing bad outcomes—including economic sclerosis with sluggish growth rates for productivity and living standards while advancing monopoly capitalism. These outcomes could well have gotten a lot worse.. This policy memo focuses on the shocks of the pandemic and war rather than what could have happened without them. However, it does venture into the counterfactual of how a good money regime would have responded to those shocks, while helping demonstrate what has gone wrong. Demonstrating the links between the rottenness of the monetary system and the high inflation during the pandemic and Russian war requires sharing with the reader a preview of the differences between good and bad money regimes. A broader analysis of these should follow in subsequent policy memos
Topic:
Economics, Inflation, Fiscal Policy, and COVID-19
Political Geography:
North America and United States of America

30. The Mixed Record of China’s Belt and Road Initiative

Author:
Thomas J. Duesterberg
Publication Date:
10-2022
Content Type:
Special Report
Institution:
Hudson Institute
Abstract:
China’s Belt and Road Initiative (BRI), a signature program of Xi Jinping, has had undoubted success in supporting Xi’s ambitions to reestablish China as a global leader while strengthening its mercantilist economy. Nonetheless, developed and developing countries are reconsidering the program because of its success—largely for China itself—and because of the global economic and political crises since the onset of the COVID-19 pandemic. BRI also has increasingly visible problems caused by its operating structure, prompting participants and developed countries whose geoeconomic and geopolitical interests are undermined by the program’s expansion to reassess it. Continued BRI growth is at best questionable and probably unlikely in the wake of growing pushback to the program as well as growing problems inside China itself.`
Topic:
Economics, Infrastructure, Belt and Road Initiative (BRI), and Xi Jinping
Political Geography:
China and Asia